In the 1950s, 1960s, and 1970s to 1980s, it was common for computer users to have the source code for all programs they used, and the permission and ability to modify it for their own use. Software, including source code, was commonly shared by individuals who used computers. Most companies had a business model based on hardware sales, and provided or bundled software with hardware, free of charge.[citation needed] Organizations of users and suppliers were formed to facilitate the exchange of software; see, for example, SHARE and DECUS.

By the late 1960s, the prevailing business model around software was changing. A growing and evolving software industry was competing with the hardware manufacturer's bundled software products; rather than funding software development from hardware revenue, these new companies were selling software directly. Leased machines required software support while providing no revenue for software, and some customers able to better meet their own needs did not want the costs of software bundled with hardware product costs. In United States vs. IBM, filed 17 January 1969, the government charged that bundled software was anticompetitive.[6] While some software might always be free, there would be a growing amount of software that was for sale only. In the 1970s and early 1980s, some parts of the software industry began using technical measures (such as only distributing binary copies of computer programs) to prevent computer users from being able to use reverse engineering techniques to study and customize software they had paid for. In 1980, the copyright law was extended to computer programs in the United States[7]—previously, computer programs could be considered ideas, procedures, methods, systems, and processes, which are not copyrightable.[8][9]

Netscape's act prompted Raymond and others to look into how to bring the FSF's free software ideas and perceived benefits to the commercial software industry. They concluded that FSF's social activism was not appealing to companies like Netscape, and looked for a way to rebrand the free software movement to emphasize the business potential of sharing and collaborating on software source code. The new name they chose was "open source", and quickly Bruce Perens, publisher Tim O'Reilly, Linus Torvalds, and others signed on to the rebranding. The Open Source Initiative was founded in February 1998 to encourage use of the new term and evangelize open-source principles.[12]

While the Open Source Initiative sought to encourage the use of the new term and evangelize the principles it adhered to, commercial software vendors found themselves increasingly threatened by the concept of freely distributed software and universal access to an application's source code. A Microsoft executive publicly stated in 2001 that "open source is an intellectual property destroyer. I can't imagine something that could be worse than this for the software business and the intellectual-property business."[13] This view perfectly summarizes the initial response to FOSS by some software corporations.[citation needed] However, while FOSS has historically played a role outside of the mainstream of private software development, companies as large as Microsoft have begun to develop official open-source presences on the Internet. IBM, Oracle, Google and State Farm are just a few of the companies with a serious public stake in today's competitive open-source market. There has been a significant shift in the corporate philosophy concerning the development of free and open-source software (FOSS).[14]

While copyright is the primary legal mechanism that FOSS authors use to ensure license compliance for their software, other mechanisms such as legislation, patents, and trademarks have implications as well. In response to legal issues with patents and the DMCA, the Free Software Foundation released version 3 of its GNU Public License in 2007 that explicitly addressed the DMCA and patent rights.

Apple, a user of GCC and a heavy user of both DRM and patents, switched the compiler in its Xcode IDE from GCC to Clang, which is another FOSS compiler[23] but is under a permissive license.[24]LWN speculated that Apple was motivated partly by a desire to avoid GPLv3.[23] The Samba project also switched to GPLv3, which Apple replaced in their software suite with a closed-source, proprietary software alternative.[25]

Oracle in turn purchased Sun in January, 2010, acquiring their copyrights, patents, and trademarks. Thus, Oracle became the owner of both the most popular proprietary database and the most popular open-source database. Oracle's attempts to commercialize the open-source MySQL database have raised concerns in the FOSS community.[27] Partly in response to uncertainty about the future of MySQL, the FOSS community forked the project into new database systems outside of Oracle's control. These include MariaDB, Percona, and Drizzle.[28] All of these have distinct names; they are distinct projects and can not use the trademarked name MySQL.[29]

In August, 2010, Oracle sued Google, claiming that its use of Java in Android infringed on Oracle's copyrights and patents. The Oracle v. Google case ended in May 2012, with the finding that Google did not infringe on Oracle's patents, and the trial judge ruled that the structure of the Java APIs used by Google was not copyrightable. The jury found that Google infringed a small number of copied files, but the parties stipulated that Google would pay no damages.[30] Oracle appealed to the Federal Circuit, and Google filed a cross-appeal on the literal copying claim.[31] Oracle won the appeal, but Google won a subsequent retrial in 2016.[citation needed]

Richard Stallman's Free Software Definition, adopted by the Free Software Foundation (FSF), defines free software as a matter of liberty, not price.[32] The earliest known publication of the definition of his free software idea was in the February 1986 edition[33] of the FSF's now-discontinued GNU's Bulletin publication. The canonical source for the document is in the philosophy section of the GNU Project website. As of April 2008, it is published there in 39 languages.[34]

Unlike libre software, which aimed to solve the ambiguity problem, FLOSS aimed to avoid taking sides in the debate over whether it was better to say "free software" or to say "open-source software".

Proponents of the term point out that parts of the FLOSS acronym can be translated into other languages, with for example the F representing free (English) or frei (German), and the L representing libre (Spanish or French), livre (Portuguese), or libero (Italian), liber (Romanian) and so on. However, this term is not often used in official, non-English, documents, since the words in these languages for free as in freedom do not have the ambiguity problem of free in English.

By the end of 2004, the FLOSS acronym had been used in official English documents issued by South Africa,[43] Spain, and Brazil.[44]

The primary license difference between free software and open source is one of philosophy. According to the Free Software Foundation, "Nearly all open source software is free software. The two terms describe almost the same category of software, but they stand for views based on fundamentally different values."[45]

"We migrated key functions from Windows to Linux because we needed an operating system that was stable and reliable -- one that would give us in-house control. So if we needed to patch, adjust, or adapt, we could."

The Government of Kerala, India, announced its official support for free/open-source software in its State IT Policy of 2001,[49][discuss] which was formulated after the first-ever free software conference in India, Freedom First!, held in July 2001 in Trivandrum, the capital of Kerala. In 2009, Government of Kerala started the International Centre for Free and Open Source Software (ICFOSS).[50] In March 2015 the Indian government announced a policy on adoption of open source software.[51][52]

In the German City of Munich, conversion of 15,000 PCs and laptops from Microsoft Windows-based operating systems to a Debian-based Linux environment called LiMux spanned the ten years of 2003 to 2013. After successful completion of the project, more than 80% of all computers were running Linux.[53]

In 2004, a law in Venezuela (Decree 3390) went into effect, mandating a two-year transition to open source in all public agencies. As of June 2009, this ambitious transition was still under way.[54][55]Malaysia launched the "Malaysian Public Sector Open Source Software Program", saving millions on proprietary software licenses until 2008.[56][57]

In 2005 the Government of Peru voted to adopt open source across all its bodies.[58] The 2002 response to Microsoft's critique is available online. In the preamble to the bill, the Peruvian government stressed that the choice was made to ensure that key pillars of democracy were safeguarded: "The basic principles which inspire the Bill are linked to the basic guarantees of a state of law."[59] In September, the Commonwealth of Massachusetts announced its formal adoption of the OpenDocument standard for all Commonwealth entities.[60]

In 2006, the Brazilian government has simultaneously encouraged the distribution of cheap computers running Linux throughout its poorer communities by subsidizing their purchase with tax breaks.[60]

In April 2008,[61]Ecuador passed a similar law, Decree 1014, designed to migrate the public sector to Libre Software.[62]

In March 2009, the French Gendarmerie Nationale announced it will totally switch to Ubuntu by 2015. The Gendarmerie began its transition to open source software in 2005 when it replaced Microsoft Office with OpenOffice.org across the entire organization.[64]

In January 2010, the Government of Jordan announced a partnership with Ingres Corporation (now named Actian), an open source database management company based in the United States, to promote open-source software use, starting with university systems in Jordan.[65]

In September 2014, the Uganda National Information Technology Authority (NITA-U) announced a call for feedback on an Open Source Strategy & Policy[66] at a workshop in conjunction with the ICT Association of Uganda (ICTAU).

In August 2016, the United States government announced a new federal source code policy which mandates that at least 20% of custom source code developed by or for any agency of the federal government be released as open-source software (OSS).[67] In addition, the policy requires that all source code be shared between agencies. The public release is under a three year pilot program and agencies are obliged to collect data on this pilot to gauge its performance. The overall policy aims to reduce duplication, avoid vendor 'lock-in', and stimulate collaborative development. A new website code.gov provides "an online collection of tools, best practices, and schemas to help agencies implement this policy", the policy announcement stated. It also provides the "primary discoverability portal for custom-developed software intended both for Government-wide reuse and for release as OSS".[67] As yet unspecified OSS licenses will be added to the code.[68]

According to Yochai Benkler, Jack N. and Lillian R. Berkman Professor for Entrepreneurial Legal Studies at Harvard Law School, free software is the most visible part of a new economy of commons-based peer production of information, knowledge, and culture. As examples, he cites a variety of FOSS projects, including both free software and open-source.[69]

This new economy is already under development. To commercialize FOSS, many companies move towards advertisement-supported software. In such a model, the only way to increase revenue is to make the advertisement more valuable. Facebook has recently been criticized for using novel methods of tracking users to accomplish this.[70]

This new economy has alternatives. Apple's App Stores have proven very popular with both users and developers. The Free Software Foundation considers Apple's App Stores to be incompatible with its GPL and complained that Apple was infringing on the GPL with its iTunes terms of use. Rather than change those terms to comply with the GPL, Apple removed the GPL-licensed products from its App Stores.[71]

^FOSS is an inclusive term that covers both free software and open-source software, which despite describing similar development models, have differing cultures and philosophies.[1]Free refers to the users' freedom to copy and re-use the software. The Free Software Foundation, an organization that advocates the free software model, suggests that, to understand the concept, one should "think of free as in free speech, not as in free beer". (See "The Free Software Definition". GNU.org. Retrieved 4 February 2010.) Free software focuses on the fundamental freedoms it gives to users, whereas open source software focuses on the perceived strengths of its peer-to-peer development model.[2] FOSS is a term that can be used without particular bias towards either political approach.

^Mark (2008-05-08). "The Curse of Open Source License Proliferation". socializedsoftware.com. Retrieved 2015-11-30. Currently the decision to move from GPL v2 to GPL v3 is being hotly debated by many open source projects. According to Palamida, a provider of IP compliance software, there have been roughly 2489 open source projects that have moved from GPL v2 to later versions.

^Torvalds, Linus. "COPYING". kernel.org. Retrieved 13 August 2013. Also note that the only valid version of the GPL as far as the kernel is concerned is _this_ particular version of the license (ie v2, not v2.2 or v3.x or whatever), unless explicitly otherwise stated.

^Kerner, Sean Michael (2008-01-08). "Torvalds Still Keen On GPLv2". internetnews.com. Retrieved 2015-02-12. "In some ways, Linux was the project that really made the split clear between what the FSF is pushing which is very different from what open source and Linux has always been about, which is more of a technical superiority instead of a -- this religious belief in freedom," Torvalds told Zemlin. So, the GPL Version 3 reflects the FSF's goals and the GPL Version 2 pretty closely matches what I think a license should do and so right now, Version 2 is where the kernel is."

^corbet (2006-10-01). "Busy busy busybox". lwn.net. Retrieved 2015-11-21. Since BusyBox can be found in so many embedded systems, it finds itself at the core of the GPLv3 anti-DRM debate. [...]The real outcomes, however, are this: BusyBox will be GPLv2 only starting with the next release. It is generally accepted that stripping out the "or any later version" is legally defensible, and that the merging of other GPLv2-only code will force that issue in any case

^Prokoudine, Alexandre (26 January 2012). "What's up with DWG adoption in free software?". libregraphicsworld.org. Retrieved 2015-12-05. [Blender's Toni Roosendaal:] "Blender is also still "GPLv2 or later". For the time being we stick to that, moving to GPL 3 has no evident benefits I know of."

^Denis-Courmont, Rémi. "VLC media player to remain under GNU GPL version 2". videolan.org. Retrieved 2015-11-21. In 2001, VLC was released under the OSI-approved GNU General Public version 2, with the commonly-offered option to use "any later version" thereof (though there was not any such later version at the time). Following the release by the Free Software Foundation (FSF) of the new version 3 of its GNU General Public License (GPL) on the 29th of June 2007, contributors to the VLC media player, and other software projects hosted at videolan.org, debated the possibility of updating the licensing terms for future version of the VLC media player and other hosted projects, to version 3 of the GPL. [...] There is strong concern that these new additional requirements might not match the industrial and economic reality of our time, especially in the market of consumer electronics. It is our belief that changing our licensing terms to GPL version 3 would currently not be in the best interest of our community as a whole. Consequently, we plan to keep distributing future versions of VLC media player under the terms of the GPL version 2.